Recently, discussions about the Federal Reserve have been a bit mixed. Let me help you sort it out.

First of all, the much-anticipated "big liquidity injection" may not happen for a while. The latest dot plot shows a very gradual path for interest rate cuts—twice in 2026, once in 2027, and then rates will remain unchanged in 2028. This means that liquidity won't suddenly flood the market, and the expectation of the central bank "opening the floodgates" to create a super cycle of assets needs to be adjusted.

Secondly, regarding the $40 billion in Treasury purchases, many people directly interpret it as "expanding the balance sheet to inject liquidity." But you need to know its full name: RMP (Reserve Maintenance Purchase).

Its purpose is completely different from true quantitative easing (QE).

QE​ = Actively adding new water to the financial system's "pool" to stimulate the economy and the market.

RMP​ = Due to factors like the Treasury drawing water and corporate settlements, the water in the "pool" is about to drop below a safe line, so the Federal Reserve quickly adds some back to prevent the system from running out of water.

So, this is not about starting a new trend; it's about maintaining normal system operations. The Federal Reserve has also clearly stated that these types of purchases will significantly decrease after April next year.

So, what should we watch next?

The real macroeconomic direction hinges on two key data points:

The November non-farm payroll data released on December 16 (which may be weak due to the previous government shutdown).

The November CPI data released on December 18 (the core of the core).

Especially the CPI. If the inflation data for November does not rebound after the rate cuts in September and October, it will clear the way for further easing by the Federal Reserve in the future. Conversely, if inflation rises, the market's expected path for interest rate cuts may be delayed again.

To summarize:

The current macroeconomic picture is—no major liquidity injection, only careful maintenance. The market may have been too optimistic before, and now it needs to return to reality: liquidity won't be tighter, but it won't be significantly eased either.

For traders, this means that the simplistic logic of betting on a "water buffalo" needs to change. In the future, more attention needs to be paid to the strength or weakness of economic data itself, and how the market can find balance again amid this "neither tight nor loose" expectation.

Stay patient and pay attention to the data. #美联储降息 #美联储降息周期 #美联储利率决议即将公布